Com. ex rel. Todd v. Bank of Pittsburgh

Citations

• 246 Pa. 519
• 92 A. 750
• 1914 Pa. LEXIS 546

Syllabus

<p>Banks and tanking — Loans—Collateral security — Joint pledge— Purpose of pledge — One pledgor’s power to tind co-pledgors — Payment of note — Pledgor’s right to return of collateral.</p> <p>Three persons each owning certain shares of stock, pledged their stock certificates with a trust company as security for the payment of a promissory note. The loan for which the note was given was made jointly to the pledgors, but the note was made by one of the pledgors only, and contained a statement that the maker had “deposited herewith as collateral security for payment of this or any other liability or liabilities of mine to the holder hereof” the shares described. The loan was reduced by payments made by the three pledgors in equal proportions, and was subsequently taken over by a bank together with the collateral. Thereafter the bank was placed in the hands of a receiver who sought to hold the stock certificates as collateral security for other liabilities of the maker of the note in addition to the debt for which they had been originally pledged. It did not appear that either of the other pledgors had authorized the maker of the note to stipulate that their certificate_s should be held for other liabilities of the maker of the note, but it did appear that the trust company and the bank knew of the ownership of the certificates and the terms of their deposit. Held, the lower court erred in discharging a rule to show cause why the receiver should not be directed to surrender the collateral of one of the pledgors other than the maker of the note upon payment thereof.</p>